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[ZombiePlatypus]

This industry has figured itself out. It's Nintendo that hasn't.

Yea I dunno. Nintendo definitely has issues it needs to straighten out, but the industry as a whole has a lot of shit it needs to rectify. (All the predatory f2p nonsense, forced online, etc.)

Not to mention the overreliance on safe AAA titles on consoles.

Not saying it's all doomed, (we still have awesome games coming) but there are undeniable issues.

 

[Thunder Monkey]

This industry has figured itself out. It's Nintendo that hasn't.

That's honestly impossible in a industry with no defined market. Each generation it changes. Sometimes by a metric fuckton.

This is still a relatively young industry, and I hope beyond hope it hasn't figured itself out yet. 18-35 year olds might be a lucrative market, but they are also a constrictive market to sell to.

 

[ZombiePlatypus]

Generic Western support like FPS and sports and racing games? Nintendo has a long history with those, as has been cited in this thread. Some of those games were defining achievements like Goldeneye and WaveRace.

What made Nintendo "so unique and appealing" wasn't always Nintendo Land and WiiFit. Half their output in 2013 was mini-game collections. What made them unique and appealing was their desire to constantly push the envelope and innovate with their games, even within existing franchises. They've already abandoned that.

Yeah I wasn't necessarily referring to their Wii games in terms of them being unique. I just meant that they shouldn't conform to the bland Uber Testosterone Bald Guy shooter and annual EA sports games trend. Y'know, the indistinguishable stuff we're getting more of for the most part on the HD twins.

 

[Tookay]

That's honestly impossible in a industry with no defined market. Each generation it changes. Sometimes by a metric fuckton.

This is still a relatively young industry, and I hope beyond hope it hasn't figured itself out yet. 18-35 year olds might be a lucrative market, but they are also a constrictive market to sell to.

I'm not saying it isn't subject to change (like any tech industry) but the major players have all made the bets for the short term, and it's in a direction that doesn't need or include Nintendo to be viable. There will be major issues that Sony, MS, EA, and co. are going to have to deal with themselves but they're at least in a position of relevance and skill to deal with them. Nintendo is weighed down by an accumulation of bad decisions, corporate culture, and infrastructure that makes them both currently irrelevant and unable to easily adjust.

The characterization that it's Nintendo that knows what they are doing while the rest of the industry is in turmoil is absurd and what I'm rebutting.

 

[Pyrokai]

God, this thread is so fucking depressing.

 

[QaaQer]

Because western studios weren't that big a deal on consoles at the time.

Western console game development didn't really start to take over until years after that decision. With the exception of the games from Rare, none of the N64's western first party games helped it all that much. We like to look at the N64's western game lineup in hindsight, but it was a different environment back then. The PlayStation dominated mainly off of its dominant Japanese 3rd party support, and the shift in the console industry that the Xbox and later 360 started pulled that advantage from right under Sony's feet, and it had to change gears into what it is now -- basically an American company that still considers itself Japanese. If Nintendo had a crystal ball circa 1999 maybe they would've kept some of those western studios, even Rare, and pushed forward development of Perfect Dark 2 to respond to Halo Combat Evolved, but they didn't. The western takeover of console gaming took everyone in Japan by surprise, including Sony and Nintendo.

The worst part is that Japan hasn't really found an answer to this problem. Sony answered it by essentially turning PlayStation into an American operation. Japanese third parties are either struggling, trying to act western, shrinking their appeal, or all three. I feel like Nintendo narrowly escaped this fate because of the Wii, the DS's dominance of Japan's handheld market, and the uniquely broad appeal of its first party games.

Stepping back into the bleeding-edge hardware race in my opinion would be financially unsound for Nintendo and would basically just amount to following everyone else, which we know they're determined not to do. Plus, it wouldn't work without also being coupled with a complete revision of how Nintendo interacts with third parties. Then there's the question of whether the console market can even support three similar competing machines.

I think Nintendo's only real way out of this mess is for its next round of hardware to be something truly ahead of the market -- another striking innovation, but not something as dull as the GamePad. It would have to be a change in the entire way its platform works.

x1 + ps4 are not bleeding edge.

 

[Thunder Monkey]

I'm not saying it isn't subject to change (like any tech industry) but the major players have all made the bets for the short term, and it's in a direction that doesn't need or include Nintendo to be viable. There will be major issues that Sony, MS, EA, and co. are going to have to deal with themselves but they're at least in a position of relevance and skill to deal with them. Nintendo is weighed down by an accumulation of bad decisions, corporate culture, and infrastructure that makes them both currently irrelevant and unable to easily adjust.

The characterization that it's Nintendo that knows what they are doing while the rest of the industry is in turmoil is absurd and what I'm rebutting.

I can see where you're coming from with that. Nintendo as shown by WiiU outright failing and 3DS faltering is proof enough of that.

I think all of them are one bad idea away from irrelevancy though. Which is why each tends to double down on tested and successful ideas.

 

[DrWong]

I already know what a lot of the usual posters have to say about all of this (from the "burn Iwata and all will be ok" to "I told you guys, I told you in every thread", with the usual miraculous solutions "drop this, upgrade that, remove those, include these..."). The usual fun gaf business.

What I take from all of this are these 2 - long, yes, I know - posts below as interesting, articulated and creative contributions-responses to this interesting - but a bit over dramatic, sorry, it's how I feel it - OP:

The OP points out how Nintendo has made some definitely mistakes this last year and needs to correct them going forward but it's a bit presumptuous imo that it means they are doing major shifts such as going heavily into cellphone development or firing Iwata, especially when they just have put their studios in a new building, have just the last few months have mad more shifts in management such as Iwata taking over running NOA, and they are just now hitting a stride with simultaneous Wii U and 3DS development after difficulties adopting HD development. Those are all changes that haven't really been able to be implemented/gain traction well into 2013, so I don't think we've see the benefits of those changes until the end of 2013 (increased game production, increased advertising of the Wii U with a more focused message, potential improved relationships with Western 3rd parties with Iwata learning more about the market and what those publishers/developers might want from Nintendo, etc.)

I know people are getting a little trigger happy with other new consoles having successful launches but IIRC so did the Vita. The sales trends/predictions of the Wii U don't look great but they can improve with more titles coming more frequently with more advertisement (which will be more effective with more software to back the system). The 3rd party situation will continue to be pretty lackluster imo, even with better sales of the console just due to prevailing attitudes in the industry. Short of Nintendo releasing a paradigm shifting game for the system, I don't see much changing any time soon on that front.

I think 2014 will be a more vital year because the Wii U had a headstart and regardless of how poorly Nintendo took advantage of that, they still have a lead despite the strong start of the other consoles meaning they are still in the race despite what others want to claim. 3rd party support seems like it favors the other consoles over the Wii U already but the games aren't there yet. The Wii U is stronger in that regard than people want to give them credit for and if anecdotal evidence is worth anything, it would seem they still had a good December and the Xbox One may have already begun stalling. A lack of 3rd party support might not really hurt their hardware sales until the other consoles have build up an actual, not hypothetical, difference in software support. That means Nintendo has a chance to turn things around like they did with the 3DS.

OP brought up Japan having consistent number but other parts of the world being more important but I'd say downplaying the Wii U having an upturn in the Japanese market is overlooking how much that market can help the system. The 3DS has been successful predominately from being successful in Japan, from getting Japanese developers on board to just having support that can be localized for other parts of the world and with Nintendo increasing their localization efforts to even help 3rd parties localize games, if they had to do the same with the Wii U, it would mean there would be more games for the system. The Wii U might not be as successful in the West if they had mostly 3rd party support from the East, but it would at least help give the Wii U more of identity and therefore a niche to cater to. Nintendo already has build good relationships with most Japanese publishers and if they give them good reasons to support the console and continue to build a rapport with partnerships, it could start some much needed momentum. There already is an opportunity for Nintendo to capitalize on often neglected genres on consoles such as character action, JRPGs, in some ways survival horror these days, etc. Maybe these genres aren't necessarily past their prime, and having one platform that is dedicated to catering to audiences that want to see those games and allow for budgets and business models that make more financial sense than AAA/multiplatform development probably did for those same genres, than maybe the quality that used to be associated with Japanese development can flourish in this modern industry. We know that there are still audiences for these games, they just need to be tapped.

Nintendo it seems has also begun to take a few more chances with their franchises that have been paying off. I think the most obvious example to me is LoZ: ALBW. It rethought conventions, had a smaller team, had a younger director and lots of fresh new ideas, etc. It was a great example of Nintendo sort of trusting these developers they have been grooming for years and seeing them be able to have big success because of it. Nintendo has been sort of slow to do this but they've had success with recognizing someone like Masahiro Sakurai to have lots of talent at an early age. Hopefully they continue to let their developers do more smaller games as well as slightly bigger scale games I think an injection of new ideas could help the game development side more than the managerial side of things since creativity is the name of the game.

Not to mention many indie games being developed for the Wii U aren't hitting until next year. These are all developers that have been on board and in many cases, the sales don't have to be huge to be a success in the way AAA development does. That scale of development benefits greatly from Nintendo's approach in a way it couldn't on the Wii (but should have been able to). People keep saying indie development is the future of the industry and Nintendo has seemingly created a pretty good environment for them to thrive in. It may or it may not be enough to sustain a console due to the price point, but in combination with existing support, it can fill the gaps between big releases nicely. It already has for the 3DS.

In conclusion, there is no need for Nintendo to throw the baby out with the bathwater. We know they need to continue to make necessary changes for the Wii U to be as successful as it can. I think revising their sales estimate for the fiscal year is all but guaranteed, regardless of how well they did in December, but their future isn't only 1st party games and nothing else on the horizon. The have a lot of work to do, but I don't think the console it in danger of having to be discontinued like people think it is.

Nintendo has already been clear and consistent that they won't talk about any change or discuss a fundamental shift in home console strategy until the end of the fiscal year - Iwata's revision on corporate strategy was specific to their plans to enter emerging markets and how they plan to increase share and he has quite frequently had Q&A discussions after Nintendo has said they won't - dating back to when the Wii was doing well - based on their need to explain existing market conditions.

Q3 is important and Nintendo has referenced that in the past - the numbers for the Wii U aren't going to look good and I think the 3DS is going to miss expectations as well (but far less) although they might meet expectations with a price drop in Japan and the release of the 2DS in that territory, but they aren't going to do anything drastic on the home console front as they have been explicit about seeing their release schedule into the middle of the year play out for the Wii U. There is also zero chance Nintendo is going to rush into smartphones following a poor Q3 since it will likely eat into their one reasonably profitable product rather than somehow make up ground in their home console business.

Moreover OP doesn't really understand Nintendo's priorities - while financially it is important to Nintendo to have a good presence in home consoles in the West - Nintendo always measures the success of their businesses based on their success in Japan first and foremost, because it's their cash-cow market where they have high margins and a competitive advantage to secure development talent.

That's the reason why the N64, despite being quite profitable in the US, was largely considered a failure because they failed to capture the broad audience and mainstream market in Japan.

My predictions: Wii U will miss projections, Nintendo is going to talk about how they plan to position the console in emerging markets like China (probably announce they have acquired the Chinese distribution subsidiary that markets the Q), will talk about how they plan to diversify the lineup, and generally discuss their view that home consoles are a declining market. 3DS will also miss projections but will be a money-maker.

My modeling suggests about a ~60-70% miss in operating profit for the FY, but the return to profitability will be enough to give Nintendo another 2 years leeway despite the big miss and let them play out the Wii U. In any case, none of the major Japanese institutions holding Nintendo stock are eagerly pushing for a strategy shift - they are more concerned about the preservation of long-term value and most are on-board with Nintendo not killing their pricing power by jumping into smartphones.

I also expect a stock buy-back of about 1 billion dollars, partially Yamauchi's shares to cover the inheritance tax, but also open it up more broadly in an effort to reduce the chance of a hostile take-over. My expectation is that we will see a bump in the stock price since the operating business is really undervalued with the current Wii U problems and speculation on a strategy shift. There are some conviction buyers in the market who are gambling on silly theories proposed by the Jefferies analyst (who has zero reputation in equity research for entertainment and games btw).

 

[Tookay]

I can see where you're coming from with that. Nintendo as shown by WiiU outright failing and 3DS faltering is proof enough of that.

I think all of them are one bad idea away from irrelevancy though. Which is why each tends to double down on tested and successful ideas.

I agree that all it takes is one bad idea to become a non entity but when Nintendo makes a bad idea, their accumulated eccentricities and insulation from the industry (which are sometimes a benefit) become huge, long lasting anchors. I think that's where the Big N differs from its competitors, who are better positioned to pivot in areas like online infrastructure.

 

[RedSwirl]

x1 + ps4 are not bleeding edge.

They like to think they are.

 

[Thunder Monkey]

I agree that all it takes is one bad idea to become a non entity but when Nintendo makes a bad idea, their accumulated eccentricities and insulation from the industry (which are sometimes a benefit) become huge, long lasting anchors.

Nothing to disagree with there.

We have met at an amicable agreement then. Fun times, sorry if I'm not adding more, but I finally decided to give Lexx a shot after people saying it's good but weird and I can definitely say its weird.

 

[Tookay]

Nothing to disagree with there.

We have met at an amicable agreement then. Fun times, sorry if I'm not adding more, but I finally decided to give Lexx a shot after people saying it's good but weird and I can definitely say its weird.

No worries I always like your analysis. We don't really differ that much; I think the fact that I'm on a phone had made me less willing to explain myself than usual and hurts my points.

 

[ZombiePlatypus]

I'm not saying it isn't subject to change (like any tech industry) but the major players have all made the bets for the short term, and it's in a direction that doesn't need or include Nintendo to be viable. There will be major issues that Sony, MS, EA, and co. are going to have to deal with themselves but they're at least in a position of relevance and skill to deal with them. Nintendo is weighed down by an accumulation of bad decisions, corporate culture, and infrastructure that makes them both currently irrelevant and unable to easily adjust.

The characterization that it's Nintendo that knows what they are doing while the rest of the industry is in turmoil is absurd and what I'm rebutting.

I don't think it falls absolutely on one side or the other. There's no denying Nintendo needs to look at the mirror and reevaluate what went wrong with the WiiU.

I firmly believe conforming to by the numbers, AAA western style games or giving into cell phones are not the answer though.

Nintendo's stubbornness and insular tendencies have given us a plenty of much needed alternatives and fresh ideas at times when everything else looked like they were overdone to death.

 

[Aquamarine]

I already know what a lot of the usual posters have to say about all of this (from the "burn Iwata and all will be ok" to "I told you guys, I told you in every thread", with the usual miraculous solutions "drop this, upgrade that, remove those, include these..."). The usual fun gaf business.

What I take from all of this are these 2 - long, yes, I know - posts below as interesting, articulated and creative contributions-responses to this interesting - but a bit over dramatic, sorry, it's how I feel it - OP:

I agree...they're fantastic responses to the stance I've taken in the OP...which is fine, because this topic isn't exclusively limited to a one-sided approach. There is certainly room for debate and differing opinions and I welcome alternative perspectives...in a way, it's what makes this topic good as a "topic" instead of a specific thread post.

I just hope you keep all perspectives into consideration and avoid dismissing anyone who takes the time to seriously respond.

 

[Thunder Monkey]

No worries I always like your analysis. We don't really differ that much; I think the fact that I'm on a phone had made me less willing to explain myself than usual and hurts my points.

Maybe a little rushed is all. Your points came across reasonably well, I just didn't connect you were arguing against the idea that Nintendo is the only right ship in a sea of capsized.

My fault on that one.

 

[Apophis2036]

So what kind of big sweeping changes can Nintendo do? Is it hardware, software or something else? We know that Nintendo cannot go H2H against MS/Sony on the hardware front.

They most definitely can, they simply chose to spend a third of their hardware budget on a tablet controller this time around. Nintendo launched WiiU at $349, they could have built a console not far away from PS4 levels of power with that sort of MSRP esp as they were prepared to take a $50 loss with this console.

And I honestly don't see what Nintendo can do to make the Wii U and future consoles more attractive for 3rd party developers

Of course sales figures and the attitude that 'those people aren't the market for our games' will always be there (see the Dark Souls 2 guy 'exploding with laughter' when asked about a WiiU port) but Nintendo have to look back and take a large chunk of the blame for the current relationship with third parties. In the 80's they restricted the amount of security chips given to third parties which greatly affected those companies potential sales, in the 90's they stuck with cartridges when the rest of the industry were going with CD ROMs and in the 00's they snubbed the 'shader GPU' generation and released a last gen console with completely different controls.

I truly believe that if Iwata called a meeting with EA, Activision, Take Two, Ubisoft, Capcom, Konami, Square and Namco tomorrow and said "in 2016 we will build a new console that is architecturally and power wise on par with PS4, with a standard controller, an improved online infrastructure and Blu Ray as the media" they would all provide ports to the console. Video games are so, so expensive to initially develop nowadays that if you provide another platform that shares similarities to the other main consoles they will at least try to sell their games on the console.

To try and sell a $300 console in 2013 which is supported 95% by exclusive games only is beyond absurd. Sony would struggle to do it and they have a massive army of first party developers, massive AAA IP's and an almost unending supply of new IP's in which to draw from. For Nintendo and there 6000 strong Worldwide staff it's an impossible mission, esp when they are trying to support a handheld at the same time. Going forward Nintendo NEED third party games or they might aswell not bother with another home console imo.

Iwata should walk into the part of Nintendo HQ where they are currently planning the next console and just utter the words "x86 architecture... large, fast unified pool of RAM... GPU at least 1.5 TFLOPs in computational power" and leave. With a standard controller they could sell a console with those specs for $249 in late 2016.

I'm a huge Nintendo fan but reading how they are bullied and treated badly by third parties is pretty laughable, all of this is of their own making, the lack of third party support didn't effect them last cycle but it's certainly effecting them now...

 

[KungFucius]

I've said this so many times...Nintendo is run by out of touch, incompetent fools.

*Stupid Name
*Severly under powered
*Mario Kart should have been a launch title
*A REAL console pokemon game should have been made
*Mario 64 HD (In fact various HD 64/GameCube games)
*ALL Pokemon/Zelda/Mario etc gameboy and GBA games available on 3DS and Wii U eshop.


Easy money.

The only people who have bought WiiUs are sad Nintendo fanboys ( like myself). Most of these people had gamecube's and probably do not really want HD remakes. For me, I want new games that are at least as compelling as what I can get on my PCS4Bone. 3D world certainly qualifies.

 

[Nibiru]

The only strategy we would ever see would be another console price cut.

 

[Tookay]

I don't think it falls absolutely on one side or the other. There's no denying Nintendo needs to look at the mirror and reevaluate what went wrong with the WiiU.

I firmly believe conforming to by the numbers, AAA western style games or giving into cell phones are not the answer though.

Nintendo's stubbornness and insular tendencies have given us a plenty of much needed alternatives and fresh ideas at times when everything else looked like they were overdone to death.

I agree that Nintendo's eccentricities offer a breath of fresh air in the current gaming environment (my GOTY list is embarrassingly Nintendo-laden) but I'm also really frustrated by their inability to recognize/invest in the good trends of the industry. They've made a lot of decisions that have hurt themselves and their dedicated fans, with very little benefit.

 

[Pyrokai]

I don't think it falls absolutely on one side or the other. There's no denying Nintendo needs to look at the mirror and reevaluate what went wrong with the WiiU.

I firmly believe conforming to by the numbers, AAA western style games or giving into cell phones are not the answer though.

Nintendo's stubbornness and insular tendencies have given us a plenty of much needed alternatives and fresh ideas at times when everything else looked like they were overdone to death.

Totally agree. This company has surprised and delighted many times, and they can do it again. I'm honestly hoping they ARE looking in the mirror and doing just this, and hopefully they will do something that can turn around their fortunes.

I'd truly like to think they have an ace up their sleeves, but who knows. In my view, it's likely that the doom-and-gloom predictions (smartphones, third party, shell of former self) will come to fruition OR they have some cool stuff coming that can potentially turn their fortunes around and the industry upside down. I see nothing in between

 

[Boombloxer]

I don't think it falls absolutely on one side or the other. There's no denying Nintendo needs to look at the mirror and reevaluate what went wrong with the WiiU.

I firmly believe conforming to by the numbers, AAA western style games or giving into cell phones are not the answer though.

Nintendo's stubbornness and insular tendencies have given us a plenty of much needed alternatives and fresh ideas at times when everything else looked like they were overdone to death.

I actually thought about this the other day: "If offered, what Nintendo games would I play on iOS?"
The only thing that really came to mind was some of the VC games, Fire Emblem, and 1-2 others. I think it would be profitable for them, because those titles don't actually cost that much to make and can have a large return.

For the AAA western-style games, again, they can experiment. I wouldn't mind seeing their take on certain genres, even if they didn't work.
And no, people saying "3rd party" keep ignoring they have 11B or so in the bank. They can survive a few failures before thinking seriously about that.

To me, these aren't the miracle cure, but they'd help. It's basically pieces to push the company into the modern era. I'll also say that basically, the online portion needs to work as well as the other two. Without that, forget it. PSN/XBL are selling points for the core. Miiverse isn't.

 

[StevieP]

They most definitely can, they simply chose to spend a third of their hardware budget on a tablet controller this time around. Nintendo launched WiiU at $349, they could have built a console not far away from PS4 levels of power with that sort of MSRP esp as they were prepared to take a $50 loss with this console.



Of course sales figures and the attitude that 'those people aren't the market for our games' will always be there (see the Dark Souls 2 guy 'exploding with laughter' when asked about a WiiU port) but Nintendo have to look back and take a large chunk of the blame for the current relationship with third parties. In the 80's they restricted the amount of security chips given to third parties which greatly affected those companies potential sales, in the 90's they stuck with cartridges when the rest of the industry were going with CD ROMs and in the 00's they snubbed the 'shader GPU' generation and released a last gen console with completely different controls.

I truly believe that if Iwata called a meeting with EA, Activision, Take Two, Ubisoft, Capcom, Konami, Square and Namco tomorrow and said "in 2016 we will build a new console that is architecturally and power wise on par with PS4, with a standard controller, an improved online infrastructure and Blu Ray as the media" they would all provide ports to the console. Video games are so, so expensive to initially develop nowadays that if you provide another platform that shares similarities to the other main consoles they will at least try to sell their games on the console.

To try and sell a $300 console in 2013 which is supported 95% by exclusive games only is beyond absurd. Sony would struggle to do it and they have a massive army of first party developers, massive AAA IP's and an almost unending supply of new IP's in which to draw from. For Nintendo and there 6000 strong Worldwide staff it's an impossible mission, esp when they are trying to support a handheld at the same time. Going forward Nintendo NEED third party games or they might aswell not bother with another home console imo.

Iwata should walk into the part of Nintendo HQ where they are currently planning the next console and just utter the words "x86 architecture... large, fast unified pool of RAM... GPU at least 1.5 TFLOPs in computational power" and leave. With a standard controller they could sell a console with those specs for $249 in late 2016.

I'm a huge Nintendo fan but reading how they are bullied and treated badly by third parties is pretty laughable, all of this is of their own making, the lack of third party support didn't effect them last cycle but it's certainly effecting them now...

Most of this post is not centred in reality. First of all, when the Wii u launched they couldn't build a ps4/xb1-like console or anything like it for anywhere less than the 500ish dollars that the current models cost a year later! Do you honestly think for a second a bite do console would sell for 5-600 bucks? No, they boils aim lower not higher. Much of industry wont support them with ports regardless of the hardware due to "demographics" and return on investment projections. You can see that now with a system that is a million dollars give or take away from a 360 port that isn't happening for the most part.

 

[DrWong]

I agree...they're fantastic responses to the stance I've taken in the OP...which is fine, because this topic isn't exclusively limited to a one-sided approach. There is certainly room for debate and differing opinions and I welcome alternative perspectives...in a way, it's what makes this topic good as a "topic" instead of a specific thread post.

I just hope you keep all perspectives into consideration and avoid dismissing anyone who takes the time to seriously respond.

First, thanks again for your hard work, really appreciated. Second, I read every post to try to keep all perspectives, even if all perspectives are not equal/the same. Last, I like to think about me as smart enough to not dismiss educated-civil contributions. I hope so.

 

[maxcriden]

I read this book for a research paper I did this semester. It's a fantastic book, and easily the most insightful look into Nintendo's inner workings ever made.

I'm glad you enjoyed it as well! It's been years since I've read it, a lot of it I think I've since forgotten. I'd be very interested to re-read it.

 

[ascii42]

x1 + ps4 are not bleeding edge.

They're the bleeding edge of what can be delivered in console hardware at a reasonable price point.

 

[Apophis2036]

Most of this post is not centred in reality. First of all, when the Wii u launched they couldn't build a ps4/xb1-like console or anything like it for anywhere less than the 500ish dollars that the current models cost a year later! Do you honestly think for a second a bite do console would sell for 5-600 bucks? No, they boils aim lower not higher. Much of industry wont support them with ports regardless of the hardware due to "demographics" and return on investment projections. You can see that now with a system that is a million dollars give or take away from a 360 port that isn't happening for the most part.

Of course getting exact PS4 levels of performance for $349 was never going to happen (esp the RAM bandwidth) but they could have built an 'on par' with PS4/Xbone next gen console, something like a 4 core 1.2GHz x86 CPU / 800 GFLOP DX11.1 equivilant GPU / 5GB's of RAM / Blu Ray drive.

My point was if they were willing to have a build cost of $450 while taking the same $50 loss and selling it for $399 then without the tablet they could have gotten much closer to at least the Xbone specs while creating a much better chance of getting next gen only third party ports because of the architecture and overall computational power. The WiiU is pretty much on par with PS360 in raw performance terms and won't get ports when multi platform games go next gen only, that would not have happened if they had went with my example of a console.

The terrible sales of software like CoD, AC, Splinter Cell and Batman wouldn't have happened if consumers had seen a real tech leap from WiiU which would have encouraged more core gamers to buy it which would in turn have increased core software sales. With a decent first year install base, more core gamers to sell their core software to and hardware very similar to PS4/Xbone third parties would have stuck with the console for the long term imo.

 

[StevieP]

Of course getting exact PS4 levels of performance for $349 was never going to happen (esp the RAM bandwidth) but they could have built an 'on par' with PS4/Xbone next gen console, something like a 4 core 1.2GHz x86 CPU / 800 GFLOP DX11.1 equivilant GPU / 5GB's of RAM / Blu Ray drive.

My point was if they were willing to have a build cost of $450 while taking the same $50 loss and selling it for $399 then without the tablet they could have gotten much closer to at least the Xbone specs while creating a much better chance of getting next gen only third party ports because of the architecture and overall computational power. The WiiU is pretty much on par with PS360 in raw performance terms and won't get ports when multi platform games go next gen only, that would not have happened if they had went with my example of a console.

The terrible sales of software like CoD, AC, Splinter Cell and Batman wouldn't have happened if consumers had seen a real tech leap from WiiU which would have encouraged more core gamers to buy it which would in turn have increased core software sales. With a decent first year install base, more core gamers to sell their core software to and hardware very similar to PS4/Xbone third parties would have stuck with the console for the long term imo.

How did you see into this alternate reality where core gamers were buying a 4-500 dollar Xbox lite from Nintendo en masse?

My apologies for the typos on my previous post: I hate using smart phones that don't have keyboards

 

[Chittagong]

Nintendo has a bad habit of abandoning most strategies associated with an under-performing console instead of correctly identifying the ones that prevented it from completely tanking and retaining them for future platforms.

- They ditched their strong ties with western developers and the console FPS because it didn't help them outsell the PS1 when it's precisely what turned the N64 into a moderate success despite the system's glaring flaws.

- They had an online infrastructure that was in some ways ahead of Xbox Live circa 2006 with Randnet on the 64DD. Instead of building on that foundation, they decided to treat online as an afterthought because it failed to sell a peripheral for an already dying N64 in one of its worst performing markets.

- They closed the door on competitive yet cost-efficient hardware design because of the Gamecube, even though what sank the system was its image problem and lack of DVD playback.

I'm sure someone could provide even more examples of this.

This is actually really insightful. Superstitious avoidance of any concepts related to a failure, even when the concepts were actually net positive. Dismantling their Western development power is just shocking.

 

[ascii42]

I feel like they should have had a system that could handle PS3/360 level games in 1080p, with a improved Wii Remote, in 2011. That way it could have enjoyed a full year without the promise of the PS4 and Xbox One. The improved hardware would provide a compelling reason to get multiplats for it. As it stands, it seems to be hit or miss whether it's the version to get or not.

 

[Apophis2036]

How did you see into this alternate reality where core gamers were buying a 4-500 dollar Xbox lite from Nintendo en masse?

My apologies for the typos on my previous post: I hate using smart phones that don't have keyboards

I don't know... why are core gamers buying a PS4 lite from MS en masse when it's $100 more expensive ?.

 

[StevieP]

I don't know... why are core gamers buying a PS4 lite from MS en masse when it's $100 more expensive ?.

What types of demographics does the "Xbox" name attract vs nintendo's? Both in your own eyes and the publishers

 

[Apophis2036]

What types of demographics does the "Xbox" name attract vs nintendo's? Both in your own eyes and the publishers

The name on the box doesn't matter as much as people think imo, the Xbox brand was pretty much laughed at by most after their first console but as soon as they built a decent OS/UI/controller, got all third parties on board, secured some third party exclusives by paying for them they took half of Sony's market share away from them in a single generation.

If Nintendo had released a console with the specs I quoted above instead of a very expensive 360+ with a tablet pad then I think they would have gotten far more media / developer buzz and excitement, far more third party support, far more core gamers to buy at launch and they wouldn't be in the seemingly unfixable mess that WiiU is currently in.

Nintendo need to realise that they can have a powerful box with a standard controller which gives them a far better chance of landing third party support AND all of their quirky 'innovative' controllers... but as options and not in the box.

It will never happen under Iwata though as he is obsessed with Yamauchi's "Don't copy the competition" mantra. You can certainly take the competitions solid base and build the Nintendo charm around that... think account based Trophies / Achievements with Stars / Power Ups as a small example.

 

[Vigilant Walrus]

Release the awesome pokemon adventure RPG we've all been dying to see. the game that will sell 100 million copies and get all the red/blue fans hot over heels, like meals on wheels.

 

[TreasureHunterG]

The OP points out how Nintendo has made some definitely mistakes this last year and needs to correct them going forward but it's a bit presumptuous imo that it means they are doing major shifts such as going heavily into cellphone development or firing Iwata, especially when they just have put their studios in a new building, have just the last few months have mad more shifts in management such as Iwata taking over running NOA, and they are just now hitting a stride with simultaneous Wii U and 3DS development after difficulties adopting HD development. Those are all changes that haven't really been able to be implemented/gain traction well into 2013, so I don't think we've see the benefits of those changes until the end of 2013 (increased game production, increased advertising of the Wii U with a more focused message, potential improved relationships with Western 3rd parties with Iwata learning more about the market and what those publishers/developers might want from Nintendo, etc.)

I know people are getting a little trigger happy with other new consoles having successful launches but IIRC so did the Vita. The sales trends/predictions of the Wii U don't look great but they can improve with more titles coming more frequently with more advertisement (which will be more effective with more software to back the system). The 3rd party situation will continue to be pretty lackluster imo, even with better sales of the console just due to prevailing attitudes in the industry. Short of Nintendo releasing a paradigm shifting game for the system, I don't see much changing any time soon on that front.

I think 2014 will be a more vital year because the Wii U had a headstart and regardless of how poorly Nintendo took advantage of that, they still have a lead despite the strong start of the other consoles meaning they are still in the race despite what others want to claim. 3rd party support seems like it favors the other consoles over the Wii U already but the games aren't there yet. The Wii U is stronger in that regard than people want to give them credit for and if anecdotal evidence is worth anything, it would seem they still had a good December and the Xbox One may have already begun stalling. A lack of 3rd party support might not really hurt their hardware sales until the other consoles have build up an actual, not hypothetical, difference in software support. That means Nintendo has a chance to turn things around like they did with the 3DS.

OP brought up Japan having consistent number but other parts of the world being more important but I'd say downplaying the Wii U having an upturn in the Japanese market is overlooking how much that market can help the system. The 3DS has been successful predominately from being successful in Japan, from getting Japanese developers on board to just having support that can be localized for other parts of the world and with Nintendo increasing their localization efforts to even help 3rd parties localize games, if they had to do the same with the Wii U, it would mean there would be more games for the system. The Wii U might not be as successful in the West if they had mostly 3rd party support from the East, but it would at least help give the Wii U more of identity and therefore a niche to cater to. Nintendo already has build good relationships with most Japanese publishers and if they give them good reasons to support the console and continue to build a rapport with partnerships, it could start some much needed momentum. There already is an opportunity for Nintendo to capitalize on often neglected genres on consoles such as character action, JRPGs, in some ways survival horror these days, etc. Maybe these genres aren't necessarily past their prime, and having one platform that is dedicated to catering to audiences that want to see those games and allow for budgets and business models that make more financial sense than AAA/multiplatform development probably did for those same genres, than maybe the quality that used to be associated with Japanese development can flourish in this modern industry. We know that there are still audiences for these games, they just need to be tapped.

Nintendo it seems has also begun to take a few more chances with their franchises that have been paying off. I think the most obvious example to me is LoZ: ALBW. It rethought conventions, had a smaller team, had a younger director and lots of fresh new ideas, etc. It was a great example of Nintendo sort of trusting these developers they have been grooming for years and seeing them be able to have big success because of it. Nintendo has been sort of slow to do this but they've had success with recognizing someone like Masahiro Sakurai to have lots of talent at an early age. Hopefully they continue to let their developers do more smaller games as well as slightly bigger scale games I think an injection of new ideas could help the game development side more than the managerial side of things since creativity is the name of the game.

Not to mention many indie games being developed for the Wii U aren't hitting until next year. These are all developers that have been on board and in many cases, the sales don't have to be huge to be a success in the way AAA development does. That scale of development benefits greatly from Nintendo's approach in a way it couldn't on the Wii (but should have been able to). People keep saying indie development is the future of the industry and Nintendo has seemingly created a pretty good environment for them to thrive in. It may or it may not be enough to sustain a console due to the price point, but in combination with existing support, it can fill the gaps between big releases nicely. It already has for the 3DS.

In conclusion, there is no need for Nintendo to throw the baby out with the bathwater. We know they need to continue to make necessary changes for the Wii U to be as successful as it can. I think revising their sales estimate for the fiscal year is all but guaranteed, regardless of how well they did in December, but their future isn't only 1st party games and nothing else on the horizon. The have a lot of work to do, but I don't think the console it in danger of having to be discontinued like people think it is.

Yes. Awesome post. There's no need to pull Wii U's plug off, despite all the doomsaying drama. Your post sums it all. Still, Nintendo management need a shake up and take a new direction from young, ambitious and competitive people, regardless of the Wii U situation you provided. They're still struggling in many different aspects in the current business model.

Moreover OP doesn't really understand Nintendo's priorities - while financially it is important to Nintendo to have a good presence in home consoles in the West - Nintendo always measures the success of their businesses based on their success in Japan first and foremost, because it's their cash-cow market where they have high margins and a competitive advantage to secure development talent.

That's the reason why the N64, despite being quite profitable in the US, was largely considered a failure because they failed to capture the broad audience and mainstream market in Japan.

Another reason for why current Nintendo management should be replaced. Nintendo might be in theory a japanese-based but in practice is a worldwide company. They should act like one. To make their decisions solely based on their performance on japanese market is very dumb if you ask me, considering the huge presence they have on the west.

 

[Snakeyes]

Most of this post is not centred in reality. First of all, when the Wii u launched they couldn't build a ps4/xb1-like console or anything like it for anywhere less than the 500ish dollars that the current models cost a year later! Do you honestly think for a second a bite do console would sell for 5-600 bucks? No, they boils aim lower not higher. Much of industry wont support them with ports regardless of the hardware due to "demographics" and return on investment projections. You can see that now with a system that is a million dollars give or take away from a 360 port that isn't happening for the most part.

Really? The PS4's bill of materials including manufacturing is $382. Use DDR3 while cutting a few GBs, a smaller HDD, a slightly less powerful GPU and you could probably build a box in 2012 that wouldn't be left in the dust by the competition for a similar price as the PS4, maybe even less.

This is the same company that built a console that was 60% less powerful than the original Xbox at fraction of the price. I'm sure Nintendo could pull it off they put their mind to it.

 

[StevieP]

Really? The PS4's bill of materials including manufacturing is $382. Use DDR3 while cutting a few GBs, a smaller HDD, a slightly less powerful GPU and you could probably build a box in 2012 that wouldn't be left in the dust by the competition for a similar price as the PS4, maybe even less.

This is the same company that built a console that was 60% less powerful than the original Xbox at fraction of the price. I'm sure Nintendo could pull it off they put their mind to it.

The bill of materials estimates are a shit metric IMO. The ps4 is being sold for a not insignificant loss. The technology that went into it (new netbook CPUs and GCN Gpus), or somethig similar a year prior would be an even more expensive proposition with lower yields even when scaled down to some degree.

 

[RedSwirl]

They most definitely can, they simply chose to spend a third of their hardware budget on a tablet controller this time around. Nintendo launched WiiU at $349, they could have built a console not far away from PS4 levels of power with that sort of MSRP esp as they were prepared to take a $50 loss with this console.



Of course sales figures and the attitude that 'those people aren't the market for our games' will always be there (see the Dark Souls 2 guy 'exploding with laughter' when asked about a WiiU port) but Nintendo have to look back and take a large chunk of the blame for the current relationship with third parties. In the 80's they restricted the amount of security chips given to third parties which greatly affected those companies potential sales, in the 90's they stuck with cartridges when the rest of the industry were going with CD ROMs and in the 00's they snubbed the 'shader GPU' generation and released a last gen console with completely different controls.

I truly believe that if Iwata called a meeting with EA, Activision, Take Two, Ubisoft, Capcom, Konami, Square and Namco tomorrow and said "in 2016 we will build a new console that is architecturally and power wise on par with PS4, with a standard controller, an improved online infrastructure and Blu Ray as the media" they would all provide ports to the console. Video games are so, so expensive to initially develop nowadays that if you provide another platform that shares similarities to the other main consoles they will at least try to sell their games on the console.

To try and sell a $300 console in 2013 which is supported 95% by exclusive games only is beyond absurd. Sony would struggle to do it and they have a massive army of first party developers, massive AAA IP's and an almost unending supply of new IP's in which to draw from. For Nintendo and there 6000 strong Worldwide staff it's an impossible mission, esp when they are trying to support a handheld at the same time. Going forward Nintendo NEED third party games or they might aswell not bother with another home console imo.

Iwata should walk into the part of Nintendo HQ where they are currently planning the next console and just utter the words "x86 architecture... large, fast unified pool of RAM... GPU at least 1.5 TFLOPs in computational power" and leave. With a standard controller they could sell a console with those specs for $249 in late 2016.

I'm a huge Nintendo fan but reading how they are bullied and treated badly by third parties is pretty laughable, all of this is of their own making, the lack of third party support didn't effect them last cycle but it's certainly effecting them now...

That still doesn't quite explain why current-gen versions of games are generally skipping the Wii U outside Ubisoft. Also, by 2016 I feel like Nintendo would need to be aiming for something considerably higher than PS4 spec if it wanted to be back in that race. That would also have to assume this console generation lasts the normal four-to-five-year length.

Also, we're still not sure if Nintendo doesn't still want a low-wattage machine for the Japanese market, which is part of what drove its decisions regarding the Wii and Wii U. People in this very thread I think have suggested Nintendo go for an ARM architecture for both Nintendo's next handhelds and console for these reasons.

Of course it can definitely be argued that Nintendo should probably give up on the idea of designing a console for Japan -- a home console hasn't been hugely successful there since the PS2. At the very least if Iwata and them got it in their heads that they need to design hardware for North America first, then things might change. Sony already basically just designed a PlayStation for western markets and is now dropping it into the Japanese market. It would be interesting seeing Japan react to the total absence of a console built specifically for it. I'm definitely not asking for Nintendo to blow all its money on Sony's and Microsoft's razor & blade strategy. It needs to keep its unique profit model, and to a certain extent it needs to maintain its fiscal prudence, but a simple shift in mentality towards the west might help a lot.

At the very least it might help a shitload if Iwata, right around now when Nintendo's next hardware is undoubtedly in the planning stages, call up EA, Activision, Ubisoft, Namco, Square Enix, etc., and say to them, "We're making a new console and this is our general idea for it, what can we do to get you on board?" I don't think Nintendo will ever 100% cow tow to third parties, but it could at least due to take their suggestions at an earlier stage in the process of building its hardware.

 

[vagabondarts]

It's time for sweeping changes. I don't know what needs to happen but what they've been doing is not it.

 

[velvet_nitemare]

The bill of materials estimates are a shit metric IMO. The ps4 is being sold for a not insignificant loss. The technology that went into it (new netbook CPUs and GCN Gpus), or somethig similar a year prior would be an even more expensive proposition with lower yields even when scaled down to some degree.

This goes against every single thing we've heard from those in the know and tech sites. They're taking a hit, but it's a small one. I'd be interested to see how it compares to the hit Nintendo were taking on the Wii U at launch. Certainly nowhere near the $200 loss from the PS3 launch

 

[Apophis2036]

That still doesn't quite explain why current-gen versions of games are generally skipping the Wii U outside Ubisoft.

Although the WiiU is more like PS360 in power terms it's architecture is quite a bit different from PS360. Much slower CPU, a large pool of eDRAM which works in tandem with a much larger but slower pool of main RAM and a weaker but more modern GPU. Combine the hardware architecture differences with the incredibly small install base and core games selling abysmally and it's far from an ideal system to throw even PS360 nevermind PS4/Xbone games onto.

Had they built a $399 console with the specs I talked about earlier things would be very different imo for a variety of reasons.

Also, by 2016 I feel like Nintendo would need to be aiming for something considerably higher than PS4 spec if it wanted to be back in that race. That would also have to assume this console generation lasts the normal four-to-five-year length.

Nintendo must never release another console that is over $249 imo, at least not until they can get a foothold in the industry, start to offer everything else the other two companies do and claw back at least a third of the market share. I see this generation lasting six years so if they release in Winter 2016 they would have around three years before the next PS and XBOX arrive.

Also, we're still not sure if Nintendo doesn't still want a low-wattage machine for the Japanese market, which is part of what drove its decisions regarding the Wii and Wii U. People in this very thread I think have suggested Nintendo go for an ARM architecture for both Nintendo's next handhelds and console for these reasons.

Apart from the last three weeks, the Japanese sales say it all tbh (it was selling under 13k per month at one stage), they don't have to build a console the size of Xbone, PS4 is a very powerful console and also very compact, I'm sure that by 2016 Nintendo's engineers could build a similar spec console but even smaller.

At the very least it might help a shitload if Iwata, right around now when Nintendo's next hardware is undoubtedly in the planning stages, call up EA, Activision, Ubisoft, Namco, Square Enix, etc., and say to them, "We're making a new console and this is our general idea for it, what can we do to get you on board?" I don't think Nintendo will ever 100% cow tow to third parties, but it could at least due to take their suggestions at an earlier stage in the process of building its hardware.

Without those companies and barring catching lightning in a bottle again Nintendo have no choice but to play nice and even go as far as paying for development of ports until they can sustain themselves. As I said above a console that mostly only plays one companies games is beyond ludicrous, no company could do it, not even Valve...

 

[gingerbeardman]

Do we think there's another post-Wii U & 3DS strategy other than smartphone? I hope so.

Surely they're next move is to do away with the home console and create a single device that is a handheld that can output HD graphics straight to your TV. Kind of like PS Vita TV, but... better. 3DS HD, if you will.

 

[Snakeyes]

Nintendo must never release another console that is over $249 imo, at least not until they can get a foothold in the industry, start to offer everything else the other two companies do and claw back at least a third of the market share. I see this generation lasting six years so if they release in Winter 2016 they would have around three years before the next PS and XBOX arrive.

$299-349 would be fine if and only if their next console is an undisputed generational leap over the PS4. Which would go a long way towards repairing their image in the eyes of the mainstream. Narratives are important, as seen with the PS4. A Nintendo console that leapfrogs the competition into the next generation, coupled with a slew of revivals and new IPs would send a strong message to the industry about going back to the basics.

 

[QaaQer]

They're the bleeding edge of what can be delivered in console hardware at a reasonable price point.

I agree totally. I was just pointing out that Nintendo can compete with Sony and MS on the hardware front. This isn't 2005/6.

 

[zenosparadox]

$299 is fine if and only if their next console is an undisputed generational leap over the PS4.

How do you propose making this fiction a reality?

 

[EBreda]

First of all, congrats to the OP. Amazingly informative topic.

From the way I see this, Nintendo is heading to an inevitable portable-only future and, just maybe, 3rd party dev to mainstream home consoles.

FY numbers are truly worring, and I believe Nintendo failed to properly comunicate the U's message. Even if they had properly done so, I don't think it would have made a difference, since everyone was looking forward to the new gen. A tablet controller with old gen graphics just Isn't compelling enough now that everyone and their mother have ipads and clone-like Nintendo games on it.

I like my Wii U but it simply lacks any kind of killer features. I loved my Dreamcast but commercially I fear Nintendo is heading the same way: a 2 year old abandoned home console.

 

[RedSwirl]

Although the WiiU is more like PS360 in power terms it's architecture is quite a bit different from PS360. Much slower CPU, a large pool of eDRAM which works in tandem with a much larger but slower pool of main RAM and a weaker but more modern GPU. Combine the hardware architecture differences with the incredibly small install base and core games selling abysmally and it's far from an ideal system to throw even PS360 nevermind PS4/Xbone games onto.

Had they built a $399 console with the specs I talked about earlier things would be very different imo for a variety of reasons.

It might make more 3rd party ports a little more likely, but without other factors ensuring such a console won't sell like shit at the outset, having up-to-par hardware alone won't guarantee any third parties dropping their current views about Nintendo consoles and install bases. Many simply see Nintendo as a third wheel in their production pipelines. People like id and Gearbox even expressed desire to do Nintendo versions of their games, but it simply came down to lack of manpower to develop yet another SKU. You have others who've suffered low sales on Nintendo platforms, and yet others who have literally no working relationship with Nintendo. Most of the PC-oriented companies that have moved onto consoles recently have literally (or almost) never shipped on Nintendo hardware, ever. The Cave was the first game DoubleFine ever shipped on Nintendo hardware.

Without those companies and barring catching lightning in a bottle again Nintendo have no choice but to play nice and even go as far as paying for development of ports until they can sustain themselves. As I said above a console that mostly only plays one companies games is beyond ludicrous, no company could do it, not even Valve...

My problem with this whole vision is that simply doing what everyone else is doing, simply catching up to their standard, in my opinion wont do shit to win back third party support, or at least it won't do enough. Nintendo isn't just starting from the bottom in that area. It's starting from lower than the bottom.

Going that route, I think Nintendo would have to do all that AND something else that puts it ahead of the market in terms of ideas and innovation. Making another Xbox won't do much at all. I firmly believe the main reason the Gamecube was a limited success at best wasn't because of mini discs or the purple lunchbox, but because 1) Nintendo was still hard with 3rd parties and 2) the Gamecube offered developers nothing the PS2 and Xbox didn't. The PS2 offered its install base, the Xbox offered its PC-like architecture and Xbox Live. Nintendo, even with basically the same install base as the Xbox and better hardware than the PS2, couldn't get great third party support.

Lastly, I think to a certain extent Nintendo needs to maintain its fiscal prudence and its profit model. That's what's kept it alive all these years while Sony's and Microsoft's video game financials have been wildly unstable. Plus there's the fact that Nintendo has no business outside video games to back it up.

 

[CoffeeJanitor]

Can those endorsing the hybrid console idea explain how this would be a compelling sell to consumers? I see the handheld market declining rapidly right now, so selling a portable console in a few years doesn't seem like a great idea to me. And what evidence is there to show that such a hybrid product could be a success? The idea gives off the same vibe to me that the Gamepad/Wii U does--it's an idea, sure, but who the heck wants it/will buy it?

It just seems like a bandaid idea for huge issues that Nintendo is currently facing.

 

[QaaQer]

Can those endorsing the hybrid console idea explain how this would be a compelling sell to consumers? I see the handheld market declining rapidly right now, so selling a portable console in a few years doesn't seem like a great idea to me. And what evidence is there to show that such a hybrid product could be a success? The idea gives off the same vibe to me that the Gamepad/Wii U does--it's an idea, sure, but who the heck wants it/will buy it?

It just seems like a bandaid idea for huge issues that Nintendo is currently facing.

Good thing Iwata has said that Nintendo is not going that route.

 

[emiranda061288]

it will not change anything except the marketing, maybe in 3.5 years they will launch another console, the super wii u !!! gamepad included and backwards compatible with the Wii U, a little more powerful than the ps4 and with a change of architecture, just to try to steal the Call of Duty generation.

 

[Nirolak]

it will not change anything except the marketing, maybe in 3.5 years they will launch another console, the super wii u !!! gamepad included and backwards compatible with the Wii U, a little more powerful than the ps4 and with a change of architecture, just to try to steal the Call of Duty generation.

...How is this different from the strategy they just tried that didn't work?